the following data relating to units shipped and total 369690

The following data relating to units shipped and total shipping expense have been assembled by Archer

Company, a wholesaler of large, custom built air conditioning units for commercial buildings;



Required:

1. Using the high low method, estimate a cost formula for shipping expense.

2. The president of the company has no confidence in the high low method and would like you to check your results using a scattergraph.

a. Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Use a ruler to fit a straight line to your plotted points.

b. Using your scattergraph, estimate the approximate variable cost per unit shipped and the approximate fixed cost per month with the quick and dirty method.

3. What factors, other than the number of units shipped, are likely to affect the company’s total shipping expense?Explain.